CANADA STOCKS-TSX hits 3-week low as resources tumble

Reuters Staff

3 Min Read

* TSX down 224.79 points, or 1.6 pct, at 13,772.07

* All 10 main sectors weaker (Updates with details, commentary)

By Claire Sibonney

TORONTO, April 12 (Reuters) - Toronto’s main stock index slid 1.6 percent to its lowest level in more than three weeks on Tuesday morning, extending the previous session’s big loss, with energy issues leading the decline.

Investors were cautious as commodity prices fell for a second day and after Alcoa (AA.N) reported revenue that missed forecasts, while Japan’s upgrade of its nuclear crisis to the Chernobyl level underscored fears of slower economic growth.

The hefty energy and materials sectors, which combined make up about half of the TSX index, were down 3.1 percent and 1.7 percent respectively.

U.S. crude oil futures dropped $3 to around $107 a barrel on demand concerns, pushing Suncor Energy (SU.TO) down 3.6 percent to C$41.97 and Canadian Natural Resources (CNQ.TO) down 3.2 percent to C$44.11. [O/R]

Base-metal miners pulled back 2.7 percent on the back of weaker copper prices as Japan raised the severity of the Fukushima nuclear disaster to the highest level. [MET/L] [ID:nL3E7FB2TZ]

At 10:25 a.m. (1425 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 224.79 points, or 1.61 percent, at 13,772.07, hitting its worst level since March 18.

All of the TSX’s 10 main sectors were lower, including financials, which skidded 1.2 percent. The gold sub-sector, lost 0.7 percent as the oil-price retreat continued to dim some of gold’s safe-haven attraction. [GOL/]

Worries over the impact of Japan’s nuclear disaster and disappointing revenue figures from U.S. aluminum producer Alcoa, weighed on investor optimism. [ID:nLDE73B02A]

“Materials and energy have to deliver the stronger earnings,” said Paul Taylor, chief investment officer at BMO Harris Investment Management, noting the index’s strong bias towards resources. He added that softer commodity prices were largely responsible for the Canadian market underperforming the U.S. for the second day in a row.

“There’s the little bit of the sense that we have come very very far very quickly and so the market has rightly taken a bit of a breather until we see confirmation that we’re going to get the earnings growth that we need to support the market at these levels or higher levels,” Taylor said.